BRODBECK: Pallister should fight for no carbon tax in court

Speaking to reporters in his office in Winnipeg on Friday. Premier Brian Pallister said he will see the federal government in court if it imposed a higher carbon tax on Manitobans than Pallister's government is planning. Why not go for zero?Steve Lambert / THE CANADIAN PRESS

Premier Brian Pallister says he’s prepared to take the federal government to court if Ottawa brings in its own carbon tax on top of Manitoba’s planned levy. The premier reiterated his threat Friday during a press conference in his legislative office, although with a little more bravado than usual.

“Back off,” he warned the federal Liberal government, insisting he would take legal action if Ottawa tries to force a $50/tonne carbon tax on Manitoba by topping up Pallister’s own $25/tonne carbon levy.

It’s odd he didn’t see the hypocrisy in his threat. Or maybe he thought people wouldn’t notice. Whatever the case, the fact remains that if Manitoba can take Ottawa to court over a planned $50/tonne carbon tax versus Manitoba’s $25/tonne planned carbon tax, the province can also take the feds to court over a $50/tonne tax versus a $0/tonne Manitoba tax. In other words, Manitoba doesn’t have to levy its own tax to take Ottawa to court.

The reality is, if there’s a legal argument to be made that the federal government has no business imposing a carbon tax on Manitoba if the province has its own strategies to reduce greenhouse gas emissions, then it could make that argument with no provincial carbon tax at all.

The legal argument Pallister is referring to is one suggested by University of Manitoba law professor Bryan Schwartz. In a legal opinion he penned for the province, Schwartz says the federal government generally has the right to impose whatever tax it wants. Constitutionally, there’s nothing stopping them from imposing their own carbon tax, or any other tax.

But there is one legal fight the province could wage when it comes to a carbon tax, Schwartz suggested. It’s a slim one and it’s never been tested before at the Supreme Court. But a credible argument could be made that by imposing a tax on Manitoba, Ottawa would not be treating the province equitably compared to other jurisdictions. If Manitoba could show it’s reducing greenhouse gases as effectively as any plan proposed by Ottawa but without a carbon tax, it could argue the federal government is treating it unfairly by imposing a new tax.

“The strength of this ‘juridical equality’ argument would depend on the extent to which Manitoba could show that its made-in-Manitoba plan would accomplish federal objectives at least as well as the proposed carbon tax/levy and carbon trading add-on,” wrote Schwartz. “The more likely it is that Manitoba’s measures would provide a carbon reduction outcome which would be similar to the proposed federal regime, the easier it would be to argue that the proposed carbon tax/levy and carbon trading add-on constitute arbitrary discrimination which unduly denies Manitoba’s ability to pursue its own course.”

Schwartz argued there is no precedent for this legal argument. But if there was concrete evidence that showed Manitoba was making progress on reducing emissions without the tax, it could work. There is no guarantee it would work, but it would be a credible argument and “worthy of serious contemplation,” he said.

“The argument should not be expected to fail merely because it would only be advanced by one or two smaller provinces,” he wrote. “Instead, the Supreme Court of Canada might be expected to give this argument fair consideration and deliberation, even though those who may support it would not have anywhere near the political or economic clout within the federation as the four largest provinces.”

Which means Manitoba doesn’t have to charge a tax of its own to have a credible legal argument to fight a federal carbon tax. It simply needs to show that it has its own “made-in-Manitoba” plan to reduce emissions.

That’s what Pallister should be doing, putting a plan together to reduce emissions without a new tax. Instead, he’s using the federal tax threat as cover for his own tax. And as it stands right now, his carbon tax is not revenue neutral. Even with two planned income-tax cuts, the Pallister carbon tax is still expected to generate a net $95 million for the province.

Pallister could oppose a carbon tax and use the very legal tools he referred to on Friday to protect Manitobans from paying higher taxes. But so far it appears he’s more interested in the extra $95 million than fighting higher taxes in court.

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